With over 300 product launches in 2011, the ETF industry has been steaming with activity on all fronts. Issuers, both big and small, have been firing on all cylinders; debuting waves of first-to-market products while also filling the product development pipeline with exciting plans. Among the wave of filings made at the end of 2011 are plans from Russell and State Street for a basket of new funds, including several dividend-focused products which could find their way on many investors’ wishlists in 2012.
Russell Investments filed with the SEC for three high yield dividend ETFs, with plans to provide exposure across domestic and international equity markets (see SEC filing):
- Russell High Dividend Yield ETF (HDIV): This fund will seek to track the total return of the Russell U.S. Large Cap High Dividend Yield Index. HDIV’s underlying portfolio will consist of high dividend-paying securities selected from the Russell 1000 Index; the holdings will be selected based on yield and quality measures such as financial stability. This ETF will be market cap-weighted and rebalanced quarterly.
- Russell Small Cap High Dividend Yield ETF (DIVS): This fund will seek to track the total return of the Russell U.S. Small Cap High Dividend Yield Index. DIVS’s underlying portfolio will consists of high dividend-paying securities selected from the Russell 2000 Index; the holdings will be selected based on yield and quality measures such as financial stability. This ETF will also be cap-weighted and rebalanced quarterly.
- Russell International High Dividend Yield ETF (NYSEARCA:IDIV): This fund will seek to track the total returns of the Russell Developed ex-U.S. Large Cap High Dividend Yield Index. IDIV’s underlying portfolio will select holdings based on yield and quality measures from the Russell Developed ex-U.S. Large Cap Index. This ETF may feature exposure to American Depository Receipts (ADRs), Global Depository Receipts (GDRs), as well as European Depository Receipts (EDRs).
State Street is planning to beef up its “high yield” product lineup as well with a new fixed income ETF. The firm also laid out plans for an intrguing Latin America fund:
- SPDR Barclays Capital Short Term High Yield Bond ETF: This fund will seek to replicate the price and yield performance of the Barclays Capital 0-5 Cash Pay Constrained High Yield Index (see SEC filing). The underlying index is designed to reflect the performance of short-term, publicly issued U.S. dollar denominated, non-investment grade, fixed rate, taxable corporate bonds that have a remaining maturity of less than 5 years. This ETF will features exposure to industrial, utility, and financial institutions.
- SPDR S&P MILA 40 ETF: This fund is designed to provide investors with exposure to the 40 largest and most liquid stocks trading on the Mercado Integrado Latino Americano (MILA) platform, which is an integrated trading exchange formed by Chile, Colombia, and Peru (see SEC filing). The underlying portfolio will consist of stocks that have a market cap above $100 million and three-month average daily traded in their local markets above $250,000.
Disclosure: No positions at time of writing.
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